Blue chip stocks refer to shares of large, well-established companies that have a history of steady earnings and dividend payments. These companies typically have ample cash reserves and operate in mature industries. Some examples of blue chip stocks include Johnson & Johnson (NYSE: JNJ), Procter & Gamble (NYSE: PG), and Coca-Cola (NYSE: KO).
Investing in blue chip stocks offers several potential advantages. Their size and financial strength provide them with staying power during market downturns. Their consistent dividends can generate reliable income for investors. And their brand name recognition gives them an edge against competitors.
However, blue chip stocks also have some drawbacks to consider. Their growth rates tend to be slow and steady rather than rapid. And their high valuations may limit their upside potential. Ultimately, blue chip stocks are best suited for investors seeking lower risk and current income from dividends. They can provide a foundation of stability and predictability. That said, here are two blue chip stocks to watch in the stock market ahead of 2024.
Blue Chip Stocks To Buy [Or Avoid] In 2024
- Costco Wholesale Corporation (NASDAQ: COST)
- The Goldman Sachs Group Inc. (NYSE: GS)
Costco Wholesale (COST Stock)
Starting us off, Costco Wholesale Corporation (COST) is an international chain of membership warehouses, known for offering a wide range of products at low prices. Costco operates on a membership-based model and is one of the largest retailers in the world. The company specializes in providing a variety of merchandise, including groceries, electronics, and household items, as well as services like pharmacy and optical services, to its members.
Earlier this month, Costco Wholesale announced its financial results for the first quarter of fiscal year 2024. The results revealed a significant performance exceeding Wall Street expectations. They reported a notable 6.1% increase in net sales, reaching $56.72 billion, compared to the previous year’s $53.44 billion for the same period. This growth included a 6.2% rise in net sales and an 8.2% jump in membership fee revenue.
Year-to-date, shares of COST stock have increased by 48.75% so far. Meanwhile, during Tuesday’s mid-morning trading session, Costco Wholesale stock opened slightly green by 0.44%, trading at $674.56 a share.
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Goldman Sachs Group (GS Stock)
Next, The Goldman Sachs Group Inc. (GS) is a global investment banking, securities, and investment management firm. Additionally, Goldman Sachs provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments, and individuals.
Back in October, Goldman Sachs reported a beat for its third quarter 2023 financial results. Getting right to it, the company posted an EPS of $5.47, with revenue of $28.53 billion in Q3 2023. This is versus analysts’ consensus estimates for the quarter which were an EPS of $5.32 and revenue estimates of $11.19 billion. As a result, revenue increased by 54.35% on a year-over-year basis.
In 2023, shares of GS stock have advanced by 10.34% year-to-date. While, during Tuesday morning’s trading session, Goldman Sachs stock opened higher by 0.36%, currently trading at $382.01 a share.
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